Thursday, 14 July 2016

More on the horizontal direct effect of the principle of nondiscrimination on the ground of age: Dansk Industries (DI)

In the recent DI
case, the Court of Justice has
added another chapter to the saga of the difference between the extents of the
application of the rights arising from Directive
2000/78/EC on non-discrimination and the general principle of
non-discrimination on the ground of age in employment (the Directive also
prohibits discrimination in employment on grounds of religion, disability and
sexual orientation).

The previous
chapters were the notorious cases Mangold
and Kucukdeveci,
in which the Court dealt with the question of the application of the duty not
to discriminate against a person on the ground of his age, which was denied by
the national legislation in those cases. The Court faced the issue of the application
of the obligation of non-discrimination arising from EU secondary legislation to
cases involving two private parties. As it is widely known, there is a case law
of the Court of Justice (the Marshall
and Dominguez
case law) pointing out that directives are not applicable to private parties’
litigation (the horizontal direct effect), as these legal acts cannot establish
obligations on individuals, but only on States. In general, the Court has
always solved the issue (as in Mangold
and Kucukdeveci) declaring the
applicability to horizontal litigation of the principle of non-discrimination.
In other cases, the Court (as perhaps in Deckmyn)
the Court has ordered the national Court to interpret the national legislation
in a way which is not contrary to EU law, assuring “the uniform interpretation
of EU law”.

This however
stays at odd with the fact that general principles should have, according to
the doctrine of international law, only an interpretative value, and should not
be able to convey rights. How this can be possible, considering that the
directive itself is not applicable, and the ratio is precisely to leave to
Member states a certain margin of discretion in the application of EU law? And
how it is possible to draw a clear distinction between the uniform
interpretation of EU law, the application of directives, and the application of
the principle of non-discrimination? The answer to the question leads to two different
reflections.

The uniform interpretation of the obligation of
non-discrimination

The first pertains
to the uniform interpretation of the obligations of non-discrimination
established in the Treaties and of the effet
utile of those provisions. The uniform interpretation and the effet utile of the obligations of non-discrimination
have the scope of avoiding that Member States invoke in an instrumental way the
limits to the application of European Union law in order to avoid the
implementation of its obligations. This was the case in Dansk Industry, where the legislation of the Member state did not provide
to the applicant the indemnity for early termination of the working
relationship. The worker was at the same time eligible, at the moment of the
termination of the contract, for the retirement pension (having reached the age
of 60).

In that case,
the national judge argued that it was not possible (and this was the reason for
the question for preliminary ruling) to apply the directive to the private
party litigation. First, because this was contrary to the legitimate
expectation of the employer, who, when refusing the indemnity for early
termination, was relying on the national legislation in force. Secondly because,
as that judge maintained, there is always the possibility to raise an action
for damages in the appropriate court in order to obtain the proper compensation
from the Member State. Accordingly, the judge wanted to know if it was
appropriate to invoke the principle of non-discrimination and not apply the
national legislation, given that the principle can be retained as having the
same scope of application (if not wider) of the directive.

The Court, as
well as the Advocate General, answered that the national judge was right in
considering the Directive as such was not applicable, given that the case involved
litigation between private parties. However, the Court also maintained that the
national judge has always the duty to interpret national law in a way that it is
consistent with the directive. In this case, clearly, this was not possible, as
there was legislation in force that explicitly excluded the right to indemnity
for those workers already entitled to retirement pension. The Court said that
while it is not possible to apply the national legislation according to EU law,
then the national judge should rely, without asking the Court of Justice permission,
on the obligation arising from the principle of non-discrimination on the
ground of age in order to disapply the national provision which is discriminatory.

It is most
likely the first time in which the Court state in such a clear way the
difference between the application of uniform interpretation and the
application of the general principles. In cases as Mangold and Kucukdeveci,
the Court referred to the general principle, giving the impression that the Directive
and the general principle were very similar in scope and binding force, leaving
an open inconsistency between the solution provided and its Marshall and Dominguez
case law.

In this DI judgment,
however, the Court makes a step further. The Court holds that the principle of non-discrimination
is applicable as long as the directive is not applicable, providing it with a subsidiary
direct effect. Many scholars were already theorizing the existence of such a
subsidiary direct effect (and the President of the CJEU, Lenaerts, clarified
that in his article: The principle of
equal treatment and the European Court of Justice, Il Diritto dell’Unione Europea,
461–482) but this theoretical construction was not substantiated by the legal
reasoning of the Court. Now it is clear that, even if the directive
establishing the obligation of non-discrimination is not applicable, then the
principle can be applied.

The singular importance of the principle of
non-discrimination

The reason for
this application is to be found in the second point discussed by the Court,
which is what makes this case particularly important. The principle of non-discrimination
(on the ground of age) has been explicitly declared by the Court as an example
of a justiciable rule in AMS.
On the other hand, in the same case the Court ruled that the principle of collective
action contained in Article 27 of the Charter of Fundamental Rights of the
European Union did not create free-standing rights in a similar way.

But why is the
non-discrimination principle to be considered so important that it can be
triggered when other principles do not enjoy the same privilege? Moreover, why this
is done in a way which gives to the Court of Justice a formidable weapon to require
national courts to disapply the national provision even in cases in which the
EU legal act (the Directive) has been conceived to leave to Member States a
wide margin of discretion?

The reason is the
importance of the principle of non-discrimination, which takes inspiration from
the equality principles embodied in the various national constitutions. This
principle is even more important for the history of the process of the European
Union integration, up to the point that it is not simply a general principle
(which is, by the way, an extremely important legal instrument) but that it is
a structural and fundamental principle, which informs the whole European Union
action. Under this perspective it is easy to imagine how many of the
international agreements the EU has already negotiated or it is about to
negotiate (as TTIP
or the EU-Turkey
Joint Statement on migration) can be challenged in front of the Court. It
is, for instance, quite easy to predict what will be the fate of provisions who
allow for the mutual recognition or the presumption of compliance of EU-US
standards in the free movement of services or of workers, or of provisions
which favor a specific category of migrants against all the others.

In all these
cases it is not just the Court of Justice which has the power to disapply the
EU provision which discriminates against the specific category of people, but
every single EU national court as regards national provisions. This conclusion,
which can sound obvious to many of the EU law geeks, it is not easily
understood at national level, as many courts (understandably) don’t feel confident in exercising what in practice is a
“diffuse control of constitutionality” (i.e. the compliance of national and EU
legislation with a parameter which lies at the top of the hierarchy of the
sources of law).

Conclusion

The Court of
Justice, with its interpretation of the notion of general principles, has
provided the national courts with an extremely effective weapon that confers on
each single national judge the power to be the guardian of the unwritten EU
constitution. However, there are still many open questions arising in the mind
of a lawyer forged in the tradition of codification: should we imply that the
same importance is to be accorded to all the different grounds of
discrimination included in the Charter (more than 14) or listed in the Treaty (Article
19 TFEU)? This is not an easy question and, for the supporter of consistency as
a fundamental legal argument in the reasoning of the Court, should bring to the
conclusion that at the present date there is a “differentiation” in the
application of the equality principle in the EU.